Q&As
Can a remedy be obtained against a company director of a personal service company (of which the director is the single director) who has been overpaid? The company acknowledge is not entitled to the money paid in error and began repayments in instalments, but subsequently stopped them and are not responding to any communication. A third party debt order has been applied for, but the bank states there are no funds in the company’s business account.
The underlying question in this Q&A is—who is the proper defendant to the claim? The claim would appear to be one in unjust enrichment, with the unjust factor being a mistake. Given that the payment was made to the company, it is the company who was enriched, and against whom the claim lies. The fact that the director may have extracted the Money from the company is unlikely to be sufficient to ground an unjust enrichment claim against the director.
Ordinarily, directors (or shareholders, in the case of Salomon v Salomon [1896] UKHL 1 (not reported by LexisNexis®)) will not be liable
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